The wave analysis on the GBP/USD pair remains relatively clear, but at the same time, it continues to become more complex. The construction of a new bearish segment of the trend is ongoing, and its first wave has taken on a rather extended form. The second wave has also become quite extensive, giving us every reason to expect the prolonged development of the third wave.
The construction of wave 2 or b still needs to be completed. The retracement of quotes from the achieved peaks is too small to consider the guaranteed beginning of wave 3 or c. The pound's rise in price against the backdrop of meetings of the Bank of England and the Federal Reserve has led to significant growth, and now wave 2 or b has taken on a five-wave form. However, it remains corrective and should be completed soon. Targets for the pair's decline within wave 3 or c are located below the 1.2039 mark, corresponding to the low of wave 1 or a.
Unfortunately, wave analysis tends to become more complex and is not necessarily in line with the news background. At this time, I am not giving up on the working scenario, but the risk of transforming the entire wave structure is present.
The end of the year is in favor of the pound.
The exchange rate of the GBP/USD pair fell by 75 basis points on Thursday. An unsuccessful attempt to break through the 23.6% Fibonacci level led to a retracement of quotes from the reached highs, but such downward retracements have been seen many times within the current wave. I do not rule out that, this time, it will end not with the beginning of a new impulsive upward wave but with another decline.
Yesterday, there was no reason for the pair to rise; today, there is no reason for it to fall. However, the amplitude of movements remains very high for semi-holiday days. In the near future, quotes may decline to the 1.2625 mark, corresponding to the 38.2% Fibonacci level, but an unsuccessful attempt to break it will indicate the market's readiness for new purchases. A successful attempt indicates the market's readiness to build wave 3 or c.
Tomorrow is the last trading day of the year, so postponing all analysis and trade openings until next year is better. The current week has shown that the market is ready to trade, but predicting its movements has become difficult. With the start of the new year, many of its participants will return to the market, and movements should become more logical.
General conclusions.
The wave pattern of the GBP/USD pair implies a decline within the descending wave 3 or c. At the moment, I am considering selling the pair with targets located below the 1.2039 mark because wave 2 or b should ultimately be completed and may end at any moment. However, I recommend staying calm in sales right now. The market has been moving inexplicably in recent days of the outgoing year. It may be worth waiting until the situation calms down.
The picture resembles the EUR/USD pair on a larger wave scale, but there are still some differences. The descending corrective segment of the trend continues its construction, and its second wave has already taken on an extended form - up to 61.8% of the first wave. An unsuccessful attempt to break through this mark may lead to the start of wave 3 or c construction.